While you might be dreaming about spending your golden years traveling and enjoying your favorite leisurely activities after a full working career, the reality is that the vast majority of workers are saving very little (if anything) for their retirement. For example, according to data from the Transamerica Center for Retirement Studies, the average worker's savings in the United States is just $144,000.

Unfortunately, that is not nearly enough money to sustain you after you retire, let alone afford you a life of great comfort and leisure. Especially since Social Security benefits only cover around 40 percent of your pre-retirement income.

Here are some important financial moves to make before you retire to ensure that you have enough money to live (and enjoy) life. Please note that we do not provide legal or tax advice. Consult your legal and/or tax advisor. 

1. Analyze your finances

Good retirement planning begins well before you plan on retiring. You should start by taking a close look at your finances. You should especially take a look at what you are spending compared to what you are saving. Look for ways to cut expenses from your budget, so that you can allocate more money to saving for retirement.

You should also think about where you plan to live after you quit working. For instance, do you own a home? If so, do you plan on living there after you retire - or are you thinking about selling it and moving somewhere else? It's important to consider your housing costs during retirement so that you can be financially prepared.

2. Start downsizing before you retire

Speaking of housing, if you are already an empty nester, it might be time to downsize your home - even if you don't plan on retiring for a while longer. For example, if you have a lot of extra space in your home, you can actually turn that extra space into profit by selling your existing house and purchasing a smaller home to live in. Then, you can save and invest the profit from the sale of your home for retirement.

Another area to consider downsizing is your vehicle(s). For instance, if you are no longer driving kids around, then you might not need as big of a vehicle. Driving something smaller and more economical can help you save more money for retirement.

3. Increase your emergency savings

In addition to saving for retirement, you should also be saving money in an emergency fund to cover potential emergencies like the loss of a job or incurring large medical expenses. Most financial experts recommend that people save enough money in an emergency fund to cover their living expenses for at least three to six months.

However, you should actually consider saving even more money in an emergency fund to ensure that you never have to make early withdrawals from your retirement savings - which could leave you without enough money to live on after you retire.

4. Beef up your retirement savings by investing in a Roth IRA (Individual Retirement Account)

By investing in a Roth IRA, you can reduce the amount of income taxes that you have to pay on your retirement income. Since the money you contribute to a Roth IRA is after-tax, you don't have to pay any taxes on the money that you withdraw - which includes money accrued from your investments - once you have met the eligibility requirements: 

• At least 59 and 1/2 years old 
• Had the Roth IRA account for at least 5 years 

Therefore, saving money in a Roth IRA can help you generate a substantial amount of tax-free income after you retire. Learn more about investing for retirement, or connect with an Andover Bank professional.

5. Ensure that your investment portfolio aligns with your financial goals

Finally, you want to make sure that your investments are aligned with your retirement savings goals. A financial advisor can analyze your portfolio and offer recommendations on where to invest your money to ensure that you have enough to live on after you retire. Furthermore, you can find free financial planning tools online that can help you build a good investment portfolio based on your money, needs, and risk tolerance.

In short, when it comes to being prepared for retirement, your greatest asset isn't how much money you have saved or invested, instead, it's actually you. Specifically, the adjustments you've made to your lifestyle - like downsizing your expenses and beefing up your retirement savings - to ensure that you have enough money to live on once you retire. A big part of that comes from having a mindset that centers around saving more and consuming less.